What is a Rental Property ROI Calculator?
A Rental ROI Calculator is an essential tool for real estate investors who want to quickly figure out how much cash flow they can generate from rental and lease payments after accounting for out-of-pocket and operational expenses, such as maintenance costs, taxes, insurance and mortgage payments, as well as vacancy rates.
Aside from calculating the total cash flow, a good Rental ROI Calculator will also show the Cash-on-Cash Return and Capitalization Rate so you can easily evaluate whether a residential or commercial property is worth the investment.
How to Calculate ROI for a Rental Property
Before you can calculate for a rental property’s ROI, you’ll first need to figure out your Net Operating Income or NOI. NOI is calculated by subtracting a rental property’s annual operating expenses from its gross operating income.